Australian businesses, farms, and community organisations are set to unlock significant cost savings on solar installations, following a federal government announcement on August 5, 2026, to expand the Small-scale Renewable Energy Scheme (SRES). The scheme’s eligibility cap for solar photovoltaic (PV) systems will increase tenfold, from the current 100 kilowatts (kW) to 1 megawatt (MW), a move projected to provide upfront discounts of up to $272 per kilowatt and potentially over $68,000 off a 250 kW system.
This policy shift, intended to take effect from October 1, 2026, addresses what has been termed Australia’s “missing middle” in solar adoption. While residential rooftop solar boasts approximately 22 gigawatts (GW) of capacity, the commercial rooftop sector has historically lagged, with only about 5.6 GW installed despite an estimated 80 GW-plus of suitable roof space across the country.
Unlocking the ‘Missing Middle’ for Commercial Solar
Previously, commercial and industrial solar systems exceeding 100 kW were ineligible for the upfront Small-scale Technology Certificates (STCs) that significantly reduce installation costs for smaller systems. Instead, these larger projects had to register as power stations and claim Large-scale Generation Certificates (LGCs) over many years, a more complex and less immediate financial incentive.
The expanded SRES will now allow systems up to 1 MW to create upfront, deemed STCs. This change is designed to make solar adoption far more attractive for medium-sized enterprises, including manufacturers, agricultural operations, retail centres, and community facilities, by directly cutting the initial capital outlay.
“The Albanese Government is helping businesses, farms and community organisations cut energy costs and strengthen Australia’s energy security by slashing the cost of installing medium-sized solar systems by around 20 per cent.”
Minister for Climate Change and Energy, Chris Bowen, announced the expansion, highlighting its potential to improve productivity and competitiveness across various sectors. The government’s own modelling indicates that the upfront discount could represent approximately 20% of the installed cost of a commercial system.
For example, a 250 kW solar PV installation, suitable for a medium-sized enterprise, could see an approximate upfront discount of $68,000. A larger 500 kW system could receive $136,000 in support, while an 850 kW installation, more suited to an industrial energy user, could benefit from around $236,000 off the installation cost. These systems are projected to generate substantial annual electricity savings, with a 250 kW system potentially saving approximately $50,000 per year and an 850 kW system up to $175,000 annually.
How the Expanded STC Scheme Works
The Small-scale Technology Certificates (STCs) are a crucial component of the federal Renewable Energy Target. They represent a deemed amount of renewable electricity generated or displaced by eligible systems. The value of an STC fluctuates on an open market, typically trading up to $40 each. Installers usually factor the STC value into their quotes, providing an immediate point-of-sale discount to the customer.
While the announcement is a firm policy direction, the Clean Energy Regulator (CER) and the Department of Climate Change, Energy, the Environment and Water have noted that the expansion is “subject to regulations being made.” This means the exact design details are still being finalised, and the October 1, 2026, start date could shift if the regulations are not in place. However, the intent is clear, and businesses should begin assessing their opportunities now.
Broader Benefits and Strategic Considerations
The increased uptake of commercial solar is expected to yield broader benefits for Australia’s energy grid, contributing to greater energy security and accelerating the transition to renewable energy. More distributed generation at the point of consumption helps to alleviate pressure on the transmission network and can contribute to lower wholesale electricity prices.
Businesses considering the expanded SRES should also evaluate the role of energy storage. While the current SRES expansion focuses on solar PV, the federal Cheaper Home Batteries Program also offers STCs for eligible battery systems, typically valued at $258 to $272 per usable kWh for the first 14 kWh. Integrating batteries can further maximise self-consumption, reduce peak demand charges, and improve energy resilience, especially as solar feed-in tariffs continue to be low across much of Australia.
For businesses looking to capitalise on this opportunity, engaging with Clean Energy Council (CEC) accredited installers and reputable energy consultants is paramount. They can provide tailored advice on system sizing, energy consumption patterns, and navigate the application process for these significant incentives. Understanding the interplay between solar generation, potential battery storage, and your choosing your Australian energy provider in 2026: a definitive guide is crucial for optimising long-term energy savings.
Future Outlook
Australia’s solar market continues its rapid evolution. The AEMO’s Q2 2026 Quarterly Energy Dynamics report, released August 1, 2026, highlighted that cumulative rooftop solar capacity in the National Electricity Market (NEM) reached 26.4 GW across 3.9 million installations by the end of June 2026. This commercial solar expansion is a critical next step in leveraging Australia’s abundant solar resources to meet the national target of 82% renewable energy by 2030.
Businesses across Queensland, New South Wales, Victoria, South Australia, and Western Australia are particularly well-positioned to benefit from this expanded scheme, which is poised to drive a new wave of investment in commercial-scale solar. The move signals a clear federal commitment to supporting broader decarbonisation efforts beyond the residential sector. Small-scale technology certificates for batteries are also available, with amendments to the Renewable Energy (Electricity) Regulations 2001 commencing on May 1, 2026.
| System Size | Estimated Upfront STC Discount (approx.) | Estimated Annual Electricity Savings (approx.) |
|---|---|---|
| 250 kW | A$68,000 | A$50,000 |
| 500 kW | A$136,000 | A$100,000 |
| 850 kW | A$236,000 | A$175,000 |
Note: These figures are estimates based on current STC values (approx. $272/kW) and government modelling. Actual savings and discounts may vary based on location, system specifics, and market conditions.